Hamleys owner Baugur, which had made a preliminary 42p-a-share offer worth £40.2m, blamed the move on changes to the retailer’s share register.

Baugur first signalled interest in Moss Bros last year, but speculation was been rife before today that it may walk away. Moss Bros recently reported a £1.4m annual loss.

It is thought the Moss and Gee founding families behind the chain – who own an estimated 25% – were opposed to the Baugur takeover. In addition, fashion chain Laura Ashley has increased its stake in the firm to almost 10%.

Baugur said the recent changes to the share register meant the execution risk associated with completing the proposed offer had become unacceptable.

Moss, which also trades under the Savoy Taylors Guild and Cecil Gee brands, was launched in 1851 as a second-hand store. It was created in its current form from the merger of Moss Bros Hire and Cecil Gee in 1898.

Baugur is also a major investor in fashion chains including Karen Millen, Coast and Oasis, as well as shoe brands such as Nine West and Pied a Terre.

Last week, it sold loss-making business MK One, which sells budget clothing, to retail restructuring specialist Hilco for an undisclosed sum.

Baugur owns 28% of Moss, with Laura Ashley holding 9.85%, the Gee family in control of 5.13% and the Moss family owning 18.18%.